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How shared ownership works
I you cannot afford to buy a home outright, you may qualify to buy using the government’s shared scheme which allows you to buy a share of the property, between 10% and 75%, and pay rent and service charges to the landlord on the rest.
Shared ownership homes are offered by housing associations, local councils, and other organisations, i.e.: the landlord.
Who can buy a Shared Ownership Home
You can buy a home through shared ownership if both of the following are true:
Your household income is £80,000 a year or less (£90,000 a year or less in London)
You cannot afford all of the deposit and mortgage payments for a home that meets your needs
Additionally, one of the following must apply:
You’re a first-time buyer
You used to own a home but cannot afford to buy one now
You’re forming a new household – for example, after a relationship breakdown
You’re an existing shared owner, and you want to move
You own a home and want to move but cannot afford a new home that meets your needs
For some homes you may have to show that you live in, work in, or have a connection to the area where you want to buy the home.
Shared ownership in six easy steps.
1) Get yourself registered with housing associations developing in the area you want to live.
2) Contact them and arrange viewings.
3) Make an offer and, if successful, the housing association will offer you a property.
4) Instruct Youngs Law.
5) Youngs Law will carry out the conveyancing checks and exchange contracts.
6) Completing your purchase and moving in.
Can I buy more shares?
You can buy more shares in your home; this is known to as ‘staircasing’. When you buy more shares, you will pay less rent as you will own a larger share of your home.
You can usually buy shares of 10% or more at any time though some older leases only allow you to buy shares of 25% or more and some new leases will allow you to buy shares of 5% or more.
The price of your new share will depend on how much your home is worth when you want to buy the share.
In most cases you will eventually be able to own 100% of the property, at which point the shared ownership clauses in the lease will fall away.
Can I sell my shared ownership home?
Selling a shared ownership home is known as a resale and can be done at any time for a price determined by an RICS valuer. Depending on you lease, the landlord may have up to two months (known as the nomination period) to find a suitable buyer that meets the eligibility criteria. If your landlord is unable to find a buyer within the nomination period, the share can be sold through an estate agent.
The sales price for a resale is determined by a RICS valuer.
Can I decorate my shared ownership home?
You can paint, decorate, and refurbish the home as you wish, like any other homeowner. For new-build homes, it’s recommended that you do not decorate in the first year to give the building time to dry out and settle.
The landlord is not responsible for carrying out refurbishment or decorations. For example, replacing
kitchens or bathrooms.
If you want to make any structural changes to your home, you’ll need to check with your landlord first to see if you need permission. You’ll need to check with your landlord what counts as a home improvement and get permission before you carry out these works.
Your responsibilities and the landlord’s obligations will be set out in the lease. These will be explained to you during the application process.
Who is responsible for repairs and maintenance?
If you live in a flat, you are responsible for all repairs inside your home while the landlord must carry out repairs and maintenance of the building and communal areas. Sometimes the landlord may support you with repairs in your home for some time after you buy it.
Why Choose Youngs?
Youngs Law have a dedicated team for new build and shared ownership properties who pride themselves on ensuring that your transaction goes through smoothly and in timely fashion. Our experience in new build and shared ownership properties allows us to work with developers and housing associations to achieve a smooth and timely transaction.
We will carry out all the necessary legal checks and paperwork whilst communicating with you so that you are kept informed at all stages of the process.
We are proud to hold Law Society Legal Excellence and Law Society Conveyancing Quality Scheme accreditation.
National New-Build Conveyancing
Youngs Law have five offices nationwide so can help you wherever your location. Though nowadays you do not need to visit a solicitor when buying or selling a home, if you want to visit us our offices are in Havant, Southampton, Liverpool, Stoke-on-Trent and Newcastle-under-Lyme.
Other Property Services
- Buying a property (freehold & leasehold)
- Selling a property (freehold & leasehold)
- Shared ownership
- Right to Buy
- Right to Acquire
- Transfer of equity
- Lease extensions
- Buy to let
For more information about conveyancing, you can read our blog – everything you need to know about conveyancing
Chartered Legal Executive – Havant
Conveyancing Executive – Havant
Solicitor – Stoke-On-Trent
Solicitor | Newbuild Team- Southampton
What is residential conveyancing?
Residential conveyancing is the term used for the legal process in which a house is bought or sold. The term residential simply refers to the fact that the property that is involved in the transaction is for living in and not a commercial transaction, such as buying a shop or building used to business.
How long does it take?
The time it takes for the process to complete will vary from property to property. There can be complications that arise which may mean more work is required but as a rough guideline you should expect the process to take somewhere between 8 and 2 weeks.
What is a "chain"?
A chain is the term used when there is a line of people wanting to buy but are waiting on the completion of their sale or the sale of the house they’re buying to move.
This leads to a number of linked transactions, each dependent on the other, and exchange of contracts must take place simultaneously in all transactions (usually with the completion dates also being synchronised).
What does exchange mean?
Exchange refers to the exchanging of contracts. Once exchange has taken place, usually by a conveyancer over the phone, the contract is legally binding and you cannot pull out of the transaction.
Up until that point, either party are free to withdraw from the deal.
How much deposit do I have to pay?
The industry norm is for a deposit is 10% of the purchase price. Sometimes buyers cannot find that amount and a lesser amount can be negotiated and you are also entitled to pay more than 10% if you have the money available and want to use a small loan amount or mortgage.
Often the deposit received on the sale is passed down the line of purchases (which in many instances will be less than 10%). It may be difficult to negotiate a deposit of less than 5%.
What is a survey?
A survey or home buyers report is a highly recommended part of any house purchase. Under English law you take the property as you find it and the survey will give you an overview into the property so you know that there are no issues and if issues are found, the price is often renegotiated.
Whilst some buyers are content to do that themselves or to have it looked over by a builder, in the majority of cases buyers arrange for properties to be inspected by a professional surveyor.